August 12, 2008, 4:19 PM — Cisco Systems has combined the engineering teams for all its small and medium-sized business (SMB) products, forming a single group to develop products for the Cisco and Linksys brands.
The new team could swap features across the two brands, bringing Linksys ease-of-use innovations to Cisco gear and more advanced capabilities such as customization features from the parent brand down to Linksys equipment, said Andrew Sage, vice president of small business sales, worldwide channels at Cisco.
The move, which comes as Cisco also folds its Linksys channel partner program into Cisco's, is the latest nudge toward an eventual elimination of the Linksys brand that executives have hinted at several times. But the company is not making changes to product branding, Sage said.
Linksys is a strong brand in home and small-business networking gear in the U.S., coming from the successful Irvine, California, vendor Cisco acquired in 2003. But the name isn't well known in other countries. And recognizing the size and dynamism of the SMB market, Cisco has jumped deeper into a market where Linksys made its name.
Cisco says the Linksys gear is designed for SMBs with fewer technology demands, which buy one piece at a time and set up networks themselves. It lacks some features of Cisco's own small-business gear, such as unified communications and certain security capabilities. But Chairman and CEO John Chambers has described a long-term goal of bringing all Cisco products under a single brand.
The two changes discussed on Tuesday follow the creation of a Small Business Council to align Cisco's small-business strategy worldwide. Councils like this are part of an overall reorganization of Cisco that Chambers has said was made possible by new communication tools, including TelePresence high-end videoconferencing, that allow a shift from command-and-control management. The Small Business Council consists of Executive Vice President and Chief Marketing Officer Sue Bostrom, Senior Vice President of Worldwide Channels Keith Goodwin and Small Business Technology Group Senior Vice President Ian Pennell.
Neither change discussed Tuesday affects consumer products, which Cisco has positioned as a major growth area for the future -- even TelePresence is headed to the home -- but has kept under the Linksys brand.
Under the change in channel strategy announced Tuesday, the approximately 20,000 resellers in the Linksys Partner Connection program have until Sept. 16 to become Cisco Registered Channel Partners. Joining the Cisco program at this tier will only require a few registration steps, not the extensive training required for higher certifications, Sage said. The resellers will gain access to some free training as well as discounts, marketing and other benefits.
The reorganization should make it easier for Cisco to handle its channel for the critical SMB customer base, where it wants to gain market share, said Ken Presti, a channels analyst at Presti Research and Consulting. Cisco is not as strong in SMB, where it faces competition from Netgear and D-Link Systems, as in large enterprises, he said.
"This is a company that clearly has designs on that market space," Presti said.
Shifting to the Cisco program shouldn't be too much work for Linksys partners, Presti said. But making the change could be hectic with just 30 days.
"I think that's a little bit too soon, because you've got to give these guys some time to digest the change," he said. If they haven't become Cisco partners, those resellers could still buy products from distributors and resell them, but without discounts or other partner benefits.
